B.C. now has the ninth highest combined personal income tax rate in Canada and the United States, a new study by the Fraser Institute reveals.
The province also has the highest taxes on business investment anywhere in Canada.
The Vancouver-based think tank says this hurts B.C.’s ability to compete for skilled workers and investment.
“The B.C. government has recently made worse the province’s long-standing tax competitiveness problem with recent hikes to personal and corporate income taxes, payroll taxes, carbon taxes, vehicle taxes and property taxes—all of which make it harder to attract potential skilled-workers, investors and businesses,” says report co-author Ben Eisen.
Many U.S. states that compete directly with B.C., including Washington and Alaska, don’t even have a state-level tax, he notes.
The study found B.C.’s top combined personal income tax rate of 49.8 per cent—which kicks in at $150,000 of income—is about 13 points higher than in Washington and Alaska, where it is 37 per cent.
The report also found that business investment per worker in B.C. (an indicator of worker prosperity and living standards) lags behind the national average.
“B.C.’s tax regime is simply uncompetitive with not only neighbouring U.S. states but also several Canadian provinces,” Eisen says.
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